Each week across the ACM network Ali and Gaby Rosenberg offer quick tips for big wins in understanding your money. The sisters are co-founders of the Blossom micro-investing app.
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![The five stages of financial wellbeing - what stage are you at? The five stages of financial wellbeing - what stage are you at?](/images/transform/v1/crop/frm/172575538/4fa556ef-0157-495d-829e-1213c17ecc42.jpg/r0_0_1600_900_w1200_h678_fmax.jpg)
You may just think of it as managing money, but chances are your bank, health professional or even your employer has started talking about the importance of 'financial wellbeing'. It's actually a concept we embrace at Blossom, because it goes beyond the act of having money, and considers how feeling secure and in control of your finances improves your quality of life overall.
One of the advantages of financial wellbeing is that it can be measured in stages, which is grounding in itself, and you can move through the stages during your life. So, where would you sit?
Stage 1: Chaos
In this stage, you often think about money, or your lack of it. You're struggling to meet your basic needs and may be living pay to pay, with little or no savings. Financial emergencies, like your car or fridge breaking down, are unmanageable. The focus here is stabilising your financial situation with a budget, and starting to pay off high-interest debt.
Stage 2. Stability
In stage 2, you're able to meet your basic needs without stress and have some savings set aside for emergencies. You have a budget and are managing your expenses effectively. If you have debt, you're making regular payments. You have a handle on your day-to-day finances and can start planning for the future with more confidence.
3. Security
Here you could comfortably cover several months of living expenses, and you regularly contribute to your superannuation. Your debts are fully or almost paid off, and insurance protects you from unforeseen events. As well as managing your current expenses, you're investing and saving for big future goals, such as buying a home, a side business, or education.
4. Freedom
Now you have enough savings and investments to support your lifestyle without relying solely on a salary. Your investments generate income that covers your living expenses, and you're free from any big debts, including a mortgage. You can choose how you spend your time, which may mean retiring early, pursuing a passion project, or working part-time. You have a strong sense of control and security over your financial life.
5. Abundance
In this final stage, your wealth exceeds your needs and you can focus on making a positive impact on the world. You're able to donate money to charities, support causes that are important to you, and set aside wealth for future generations. You use your financial resources to enrich your life and the lives of others, which brings a deep sense of fulfillment.
Each stage offers its own challenges and rewards, but accepting where you are today is the first step! The good news is, we're all on the road to Abundance, and that sounds like a pretty beautiful place to be.
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Sisters Ali & Gaby Rosenberg are the co-founders of Blossom App.
- Nothing in this article should be construed as being personal financial advice. It is general in nature only and has not taken into account your particular circumstances, objectives, financial situation or needs. You should consider whether the information, strategies and investments are appropriate and suitable for you or seek personal advice from a licensed financial planner before making an investment decision. Past performance does not indicate future performance. BlossomApp Pty Ltd (ABN 74 644 216 151) is a C.A.R. (No. 001284228) of Gleneagle Asset Management Ltd (AFSL 226199). Consider the PDS and TMD at blossomapp.com to ensure the product suits your needs.
- ACM co-owner Alex Waislitz has a stake in a company that provides services to Blossom. ACM is the publisher of this masthead.